Avery Textile Company manufactures high-quality bed sheets and sells them in sets to a well-known retail company for $80 a set. Avery has sufficient capacity to produce 150,000 sets of sheets annually; the retail company currently purchases 100,000 sets each year. Avery's unit-level cost is $45 per set and its fixed cost is $1,050,000 per year. A motel chain has offered to purchase 15,000 sheet sets from Avery for $56.25 per set. If Avery accepts the order, the contract will prohibit the motel chain from reselling the bed sheets.
Required
Should Avery accept or reject the special order? Support your answer with appropriate computations.